Suppose that one-year treasury bills yield 8 percent in the United States and 6 percent in Japan. Investors will prefer to purchase the U.S. securities, unless they expect the dollar to __________ against the yen over the next year
A) depreciate by less than 2 percent
B) depreciate by more than 2 percent
C) appreciate by less than 2 percent
D) appreciate by more than 2 percent
B
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Perfectly competitive firms are sometimes called price makers because they have significant control over product price
a. True b. False
Independent grocery stores are best-advised to
A. provide a level of service, community involvement, and types of goods Walmart does not. B. hire less-qualified people to keep costs down. C. sell exactly the same goods Walmart does. D. "out Walmart" Walmart by lowering prices.
New Keynesian inflation dynamics predicts that an increase in aggregate demand will generate, in chronological order
A. a rightward shift in a vertical short-run aggregate supply curve, a short-run increase in real Gross Domestic Product (GDP), an upward movement along the short-run aggregate supply curve, and an increase in the price level. B. an leftward shift in a vertical short-run aggregate supply curve, a short-run decline in real Gross Domestic Product (GDP), an upward movement along the short-run aggregate supply curve, and an increase in the price level. C. a leftward movement along a horizontal short-run aggregate supply curve, a short-run decline in real Gross Domestic Product (GDP), a downward shift in the short-run aggregate supply curve, and a decrease in the price level. D. a rightward movement along a horizontal short-run aggregate supply curve, a short-run increase in real Gross Domestic Product (GDP), an upward shift in the short-run aggregate supply curve, and an increase in the price level.
Which of the following statements is FALSE, with respect to what economist Adam Smith called the diamond-water paradox?
A. There are relatively few diamonds, so the marginal utility of the last diamond consumed is relatively high. B. Total utility does not determine what people are willing to pay for a unit of a particular commodity; marginal utility does. C. The total utility of water greatly exceeds the total utility derived from diamonds. D. The demand for water is much smaller than the demand for diamonds.